Financial Management and Analysis ppt

[...]... Journal of Banking and Finance, Financial Management, and the Financial Analysts Journal xiii PART One Foundations CHAPTER 1 Introduction to Financial Management and Analysis inance is the application of economic principles and concepts to business decision-making and problem solving The field of finance can be considered to comprise three broad categories: financial management, investments, and financial institutions:... be concerned with Introduction to Financial Management and Analysis 5 these factors Expected return is the difference between potential benefits and potential costs Risk is the degree of uncertainty associated with these expected returns Financial Analysis Financial analysis is a tool of financial management It consists of the evaluation of the financial condition and operating performance of a business... parts (Parts One and Two) cover the basics, including the objective of financial management, valuation principles, and the relation between risk and return Financial decision-making is covered in Parts Three, Four, and Five where we present long-term investment management (commonly referred to as capital budgeting), the management of long-term sources of funds, and working capital management Part Six... Sons, 2002) and Analysis of Financial Statements (published by Frank J Fabozzi Associates, 1999), co-author with David R Peterson of the AIMR monograph Company Performance and Measures of Value Added (1996), and author of Financial Management and Analysis (published by McGraw-Hill, 1994) Professor Peterson has published articles in journals including the Journal of Finance, the Journal of Financial Economics,... principles and theories of finance using intuition, instead of with proofs and theorems For example, we walk you through the intuition of capital structure theory with numerical and real world examples, not equations and proofs Another way we try to assist you is to approach the tools of finance using careful, step-by-step examples and numerous graphs ORGANIZATION Financial Management and Analysis is... economy, and the forecasting of its future condition and performance It is, in other words, a means for examining risk and expected return Data for financial analysis may come from other areas within the firm, such as marketing and production departments, from the firm’s own accounting data, or from financial information vendors such as Bloomberg Financial Markets, Moody’s Investors Service, Standard... Introduction to Financial Management and Analysis 15 their investment, and the maximization of accounting profit is not equivalent to the maximization of shareholder wealth.4 Many U S corporations, including Coca−Cola, Briggs & Stratton, and Boise Cascade, are embracing a relatively new method of evaluating and rewarding management performance that is based on the idea of compensating management for... management Part Six covers financial statement analysis which includes financial ratio analysis, earnings analysis, and cash flow analysis The last part (Part Seven) covers several specialized topics: international financial management, borrowing via structured financial transactions (i.e., asset securitization), project financing, equipment leasing, and financial planning and strategy DISTINGUISHING FEATURES OF... this book to fit their particular time frame for the course and their students’ preparation (for example, if students enter the course with sufficient background in accounting and taxation, Chapters 5 and 6 can be skipped) We believe that our approach to the subject matter of financial management and analysis will help you understand the key issues and provide the foundation for developing a skill set necessary... ■ Financial management Sometimes called corporate finance or busi- ness finance, this area of finance is concerned primarily with financial decision-making within a business entity Financial management decisions include maintaining cash balances, extending credit, acquiring other firms, borrowing from banks, and issuing stocks and bonds ■ Investments This area of finance focuses on the behavior of financial . 22 Financial Ratio Analysis 721 CHAPTER 23 Earnings Analysis 775 CHAPTER 24 Cash Flow Analysis 797 PART SEVEN Selected Topics in Financial Management 821 CHAPTER 25 International Financial Management. 625 CHAPTER 19 Management of Cash and Marketable Securities 627 CHAPTER 20 Management of Receivables and Inventory 651 CHAPTER 21 Management of Short-Term Financing 679 PART SIX Financial Statement Analysis. ONE Foundations 1 CHAPTER 1 Introduction to Financial Management and Analysis 3 CHAPTER 2 Securities and Markets 27 CHAPTER 3 Financial Institutions and the Cost of Money 49 CHAPTER 4 Introduction